Cryptocurrency regulation in Europe: EP approves DAC8 rules
Cryptocurrency regulation in Europe: EP approves DAC8 rules
The European Parliament in Strasbourg has approved the eighth edition of the Directive on Administrative Cooperation (DAC8), taking a significant step towards the regulation of cryptocurrencies.
The DAC8 regulations were approved with 535 votes in favor, 57 votes against, and 60 abstentions, Coincu informs.
DAC8 includes amendments to the EU Directive on Administrative Cooperation (DAC). The said document regulates tax reporting requirements for all cryptocurrency transactions in the European Union. Companies that provide users with services for storing, exchanging, and selling cryptoassets are obliged to inform tax authorities about the participation of EU citizens in transactions.
This will ensure the automatic exchange of information on cryptoassets between EU countries. The reporting format is governed by the OECD Common Reporting Standard (CRS) and identifies two types of reporting entities: cryptoasset providers and cryptoasset operators.
The Markets in Cryptoassets Act (MiCA) legislation was passed earlier this year, and DAC8 enhances the EU's ability to combat tax fraud arising from crypto activities.
DAC8 also declares requirements for crypto service providers to provide detailed information about all transactions, concurrently or before they take place.
DAC8 complies with international documentation requirements, in particular the Crypto Asset Reporting Framework (CARF) and the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) rules. All these measures make it possible to strengthen the mechanisms for combating illegal activities in the European financial system.
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